INEFFECTIVE AND INFLATIONARY – CHILDCARE SUBSIDY FAILING AUSTRALIAN FAMILIES AND CHILDREN

New analysis shows that families with young children have received little to no cost relief from the increases to the rate of the Childcare Subsidy (CCS), due to fee increases

Friday 01 November 2024

New analysis shows that families with young children have received little to no cost relief from the increases to the rate of the Childcare Subsidy (CCS), due to fee increases [1].

The Parenthood’s CEO Georgie Dent said that the findings further prove that the CCS has been ineffective at providing tangible cost of living relief to families across Australia.

“The Federal Government’s decision to boost the CCS in July 2023 was intended to support families with young children who are doing it tough".

“However, fundamental design flaws inherent in the CCS mean this support is not flowing to families".

“Increases to the rate of the CCS, like clockwork, are followed by fee hikes".

“Over the past year, the Federal Government has invested over $5 billion into the CCS model, and during the same period, families have copped a whopping 12 per cent increase in their out-of-pocket childcare costs [2]".

“This unsustainable pattern also has broader implications for families with young children".

“Recent ABS data shows that childcare costs are a leading contributor to the inflation in service costs – the high rates of which remain a barrier to bringing down interest rates".

“So not only is the CCS ineffective at providing childcare cost relief, but it is also contributing to higher interest rates, creating a double whammy effect on families".

“We must fundamentally rethink our approach to making early learning accessible and affordable for families with young children.

“The Parenthood is calling for greater market intervention by the Federal Government that caps early learning fees at $10/day for most families and free early learning for low-income families".

“We’re glad that the Prime Minister believes that a flat fee model is the best way to rein in early childhood education and care costs and provide true relief to families [3]. We wholeheartedly support this approach,” Ms Dent said.

[1] PM’s $5b ‘cheaper childcare’ subsidy gobbled up by fee hikes – The Australian Financial Review
[2] Consumer Price Index, September 2024 Quarter – Australian Bureau of Statistics
[3] Flat-fee childcare to spearhead PM’s second-term agenda – The Australian Financial Review